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Restaurants Canada calls on Federal Government to Take Action on the Industry’s CEBA Repayment Proposal by May 31


Time is of the essence to address the acute CEBA loan repayment challenges facing restaurants and other small businesses

Today, Restaurants Canada (RC) is calling on the federal government to adopt its Canada Emergency Business Account (CEBA) repayment proposal from RC’s 2023 Federal Pre-budget Submission. With only a few weeks until the House of Commons rises for the summer on Jun. 23, 2023, and the repayment deadline quickly approaching on Dec. 31, 2023, time is of the essence to address the acute CEBA loan repayment challenges facing restaurants and other small businesses. Bankruptcy filings in foodservice have increased 116 per cent since 2022 and RC is expecting more restaurants to close their doors as a result of the federal government’s failure to take action. RC’s CEBA  recommendations ask parliament to provide struggling small businesses with a 36-month payback extension on CEBA loans, with a scale-down model on the forgivable portion. The effective plan will ensure that taxpayer funds are paid back to the government owed while saving thousands of restaurants and other small businesses from being forced to declare bankruptcy in the near future.

“Thousands of small independent operators in our industry are at breaking point as a result of their CEBA debts. That’s why we are calling on the Deputy Prime Minister, Chrystia Freeland to take meaningful action by adopting our CEBA repayment proposal to help ensure their survival,” said Olivier Bourbeau, Vice President, Federal & Québec Affairs. “We are nearing our sector’s summer high season. However, with half of all foodservice companies currently operating at a loss or just breaking even and 80 per cent making less profit today compared to pre-pandemic (2019), many of our members are weighing their options to either remain open and continue incurring further debt, or close their businesses and file for bankruptcy; a decision on CEBA before the summer season is integral to providing small-businesses with predictability.”

For the majority of Canada’s foodservice sector, the pandemic created seismic financial challenges which it is still struggling to recover from. In response, the federal government launched the CEBA program, which gave small businesses, including 83 per cent of table service and 56 per cent of quick-service restaurants, and not-for-profits interest-free loans of up to $60,000. As the repayment deadline approaches, a Restaurants Canada survey has revealed that nearly 20 per cent of the restaurants that have yet to reimburse CEBA will not be able to repay it in part or at all given the state of Canadian foodservice, findings that are unsurprising given;

  • Canada’s foodservice industry has hit the 100-billion-dollar mark, yet when adjusted for inflation, in comparison to all other Canadian business sectors, restaurants have experienced a 12 per cent drop in economic activity (GDP) from 2019 to 2022; second last to the arts, entertainment and recreation industry which is down by 19 per cent, and;
  • nearly every operational cost is on the rise due to inflation; utilities have increased by 6 per cent, proteins have increased by 9 per cent (beef), 11 per cent (seafood), 13 per cent (chicken), and cooking oil (up 40 per cent), as well as rising labour costs, and restaurateurs have been forced to absorb as much as they can to avoid impacting consumer traffic.

“For many restaurateurs, the December 31st repayment deadline is simply impossible to meet – which reflects the state of our industry as a whole. Post-pandemic operational challenges like inflation, labour shortages and supply chain hurdles are further diminishing the profitability of these businesses and lengthening the sector’s recovery process entirely,” added Bourbeau.

Restaurants Canada looks forward to learning about the government’s future plans to address the CEBA loan repayment challenges by May 31 at the latest to ensure that foodservice remains an active part of the nation’s economy.